The Yerkes Bill (D ® ® ANSWER of The Chicago Committee OF ONE HUNDRED. *'Qive Us Something.' K. H. Winston, spea/finor for Street Railroad Managers 'tefore House Judiciary- Committee, May 20, 1897. * * * " The next step should be to bring the extension of the franchises before the proper civic authorities, where, if they appear with clean hands, offering the municipality adequate compensation, the companies will receive just treatment." " We are * * * eager to meet the street railway companies half w ay, certain to be honest with them, willing to give them all they are justly entitled to." "Not a street railway official has come to me and asked that I should call into counsel the rulers of the people and formulate a plan by which the companies and taxpayers might get together.— "Aifiyoi- Harrison, rejjresentina: Cliicagro, CHICAGO, 1897 To the Honorable, the Members of the General Assembly of the State of Illinois. Gentlemen : When the Humphrey Bills met deserved defeat in in the House of llepresentatives on May 12, 1897, we may safely assume that the objectionable features embodied in those measures were ap[)arent to the members who voted against them. Public sentiment sustained the action of the House which, indeed, only re- flected the views and wishes of the people. Time need not be spent, therefore, in mere repetition of the arguments already advanced. It is true that Mr. Yerkes did not hesitate to severely criticise the action of the House and the meml)ers who voted to upset his plans. It is true that he did not hesitate to congratulate the members who voted in his favor. It is true that ho says that lie did not intend to do another thing or to lift his hand after the defeat of the Humphrey liills. " But I was prevailed upon," he says, ^'•hy lyeople connected w/tJi our vail road conqmnies^ "'^ " * to come down here and make another eft'ort. I have also been talked to with regard to moditietl bills, and while I do not believe in modifying anything in these Humphrey Bills so-called, yet I am willing to accept some modifications. At the same time I believe it is a mistake to modify them in any manner. " We do not for one moment believe that this statement of his opinion by Air. Yerkes Avill be decisive Avith the members of the House as to what ought to be done. On the contrary, we believe that the members of the Legislature will rather side with the people and consider their rights and interests. A just conclusion must therefore be based upon the facts, and in order to ascertain what the Yerkes Bill contains we invite your at- tention to the following comparison. The humbug pretense formerly insisted upon that the street rail- road bills did not come from the street railroads and their managers has now been smoked out and definitely abandoned. Mr. Yerkes himself produces the present bill, which betrays a most striking re- semblance so the discredited Humphrey Bills. 2 Yerkes Bill. Section 1. Existing street railroad companies shall have all the additional powers conferred by this act. Sec. 2. Such corporations may exercise power of eminent domain to take any property re- quired for roads, depots, power houses, etc., subject to restric- tions in section 9 below, which prohibits taking street railroad property. Sec. 3. Constitutional require- ment of consent by corporate au- thorities re-enacted for new grants ; also requires strict com- pliance w^ith all provisions of law, or to be void. Sec. 4. New licenses may l)e granted for not to exceed fifty years, and rate of f?re fixed at not to exceed five cents per ride. Sec. 5. Ordinances of exist- ing corporations extended thirty- five years from first Tuesday of September, 1897, they to charge 5 cents for twenty years for dis- tances specified in ordinances Jierehy so extended ; for remaining fifteen years, fare to be fixed by corporate authorities. PaA^ments to city in counties of 100,000 or less, one per cent. ; 100,000 to 200,000, two per Humphrey Bills. No. 258, Section 1. Sub- stantially identical. Id. Ses. 2 and 3. Substan- tially identical with provision in- serted permitting carriage of packages. Id. Sec. 4. Substantially identical. Id. Sec. 6. Substantially identical. Id. Sec. 7. Suljstantially identical, except provision in- serted that all powers and privi- leges granted to street railroad corporations shall be held con- tracts ; also except extension is for fifty years with 5 cent fare, and compensation is three per cent, for fifteen years, five per cent, for twenty 3'^ears and seven per cent, for fifteen years in counties of third class. cent. ; 200,000 and over, three })er cent, for fifteen years, five per cent for ten years and seven per cent, for ten years on gross receipts for previous year. Where road extends into two or more municipalities, payments to be dix'ided pro rata as per mileage in each. Existing compensation to corporate authorities shall con- tinue to be paid, hut shall he credited on said percentacjes. Every existing company desir- ing to avail itself of such exten- sion shall on or before the first Tuesday of August, 1897, file notice with Secretary of State and corporate authorities, and make payment of percentage to officer designated at time named in Act. Terms of act extended to roads not constructed. Sec. 6. Any motive power except steam locomotives per- mitted. Sec. 7. Tracks to be laid in center of street, etc. Sec. 8. Applications for new lines to be made to local officials named, whose report on necessity etc., of such lines is made condi- tion precedent to grant. Ordi- nance to be sold at ^auction, etc. Ordinances to e.dend existing lines not to he certified as to nec- Id. Sec. identical. Substantial! V Substantially Id. Sec. : identical. No. 148, Sec. 7. Seventh paragraph contains provisions for application, report, auction, etc., substantially identical, ex- cept that such application was to be made to the proposed state commission. No. 258, Sec. tially identical. Id. Sec. identical. 11. 10. Substan- Sabstantially essity nor sold at auction; com- pensation to be fixed by ordi- nance. Sec. 9. No corporation shall enter upon, appropriate or use whole or any part of property or tracks of another street railroad corporation, except to cross the same, without its consent. Sec. 10. Such corporations may purchase, or contract for use of, tracks or property of each other. They may consoli- date stock, property and fran- chises, unless parallel or com- peting. Previous contracts of this character legalized. Sec. 11. Repeals Horse and Id. Sec. Dummy Railroad Act, etc. identical. It will thus be seen that while the State Commission has been eliminated the present bill contains an equally vicious interference with local self-government, for it attempts to extend ordinances granted by the City of Chicago and other municipalities by an act of the Legislature. To obviate the constitutional objection, it is sought indirectly to obtain the consent of the corporate authorities by their receipt of the proposed compensation. In event of their refusal to accept the bribe and barter away the rights of the city, then it will doubtless be claimed by the street railroads that by their written acceptance and offer to pay, the extensions have already become fixed so that they cannot l)e interfered with. WHO FAVOR THE BILL? Most of the men who went to Springfield with Mr. Yerkes are known to have personal interests which he can influence ; or to be directly connected with the interests which he seeks to promote at 12. Substantially the expense of Cliictigo. Not one of them eonies forward to help secure for the })eoi)Ie fair and honest treatment at the hands of the street railroads. Thev do not re[)resent the ojjinion of the public in Chicago noi' of Illinois. riicy assume to say that there has been a great change of opinion on the street railioad bills. \\'here is the |)roof of their assertions ? No such proof exists because no such facts exist. The only corroboration offered is by Mr. Yerkes, who slates that "gentlemen who voted against the striking out of the enacting clause of these (Humphrey ) bills - ^ ^ have been taken by the hand and congratulated " by certain diai)hanous and elusive persons whose identity is not revealed. These congratulatory " men in buckram " will hardly satisfy the Legislature of the soundness of these claims. WHAT IS FAIR TREATMENT? Fair treatment, they insist, requires that a measure of protection should now be given to the capital already invested, which was se- cured in the belief that extensions of time on substantially the same basis could be had when the present terms granted by ordi- nances expire. Mv. Yerkes sajs : "The expectation has always l)een to have those ordinances extended, to have the time extended. If it had not been for that, capital would not have gone into them to the extent that it has. '' He further says : " When a man goes into an invest- ment, particularly if it is some new venture, * "'' '■" he will not only calculate to get his money back, but he will calculate to double his money.'' We all know that the capital necessar}' to change the motive power employed l)y the great Chicago companies was not only forthcoming in abundant measure so that those improvements liave been com- pleted and paid for, but good returns have been secured upon the investment. Capital is not now needed for new enterprises. No s[)eculative feature is now involved. Capital to buy the street rail- roads of Chicago can be had in any amount required to cover their actual value at from three per cent, to five per cent, per annum. The investment on that basis would be as certain as government bonds or first class mortgage securities. Why, then, should the public be expected to donate enough to enable the holders of the railway securities to " double their stock and halve their dividends," as Mr. Yerkes says. Those who expect to double their money should look elsewhere for investment. The only fair claim is the purely equitable one of repayment to the owners of the actual value of their properties, and- there should be no doubt about this. No one disputes it, and no one attacks it. The City of Chicago has no desire to deal unjustly with these com- panies, but more than this would be a donation of public property for private gain. Compare the circumstances with those of a ground lease with a provision for payment of the actual value of the im- provements belonging to the tenant at the end of the term. Can they now justly complain if the full value of their investment is repaid ? THEY OUGHT TO APPLY TO THE CITY AUTHORITIES- No disposition to take advantage of the railroads has been shown anywhere. The utterances of the Mayor of Chicago have been eminently wise and fair. In all probability they will become the new lessees themselves. Why do they not make application to the city council which cannot compel them to anything at this time? Should all fair proposals be rejected it would then be time enough to apply to the Legislature. The onl}^ possible reasons for haste cannot arise out of any con- siderations affecting the prosperity of the street railroad business. That, as we have seen, is in a highly prosperous condition. Large dividends are regularly earned and paid on stock much in excess of the value of their property ; and their net earnings, as well as their receipts, are rapidly increasing. Why, then, does this extremely urgent demand arise now? We must seek for the reasons actuating those who urg# hasty action elsewhere. Possibly private and personal interests may be involved to a greater degree than has been disclosed. Possibly these promoters may have deemed it less burdensome to deal by the wholesale, through the medium of general laws, than with the individual cases of each railroad with each different municipalitj^ Possibly the movement is speculative in character with a view to test each of sev- eral Legislatures concurrently with even a greater number of city councils and thus to obtain the most possible from the public. NO HASTY LEGISLATION REQUIRED. Mr. Yerkes assumes, and to some extent seems to have created the impression, that there is just now a serious crisis in the Chicago street railway situation. Si)eaking before the Judiciary Committee of the House on May 19th, he admits that " twenty -year ordinances for the old horse car lines might look like a proper thing," but argues that the investments now requii-ed are so heavy that "char- ters ought to be made permanent," and that the proposetl legislation is immediately necessary to induce capital to seek investment, not only in Chicago but in the State of Illinois, and thus relieve the present financial depression. We have heard various explanations of the continued tinancial depression, but believe that it has not before been attributed to the inability of the Chicago council to grant franchises to Mr. Yerkes extending beyond twenty years. In fact, this explanation is new to Mr. Yerkes himself. As late as January last, at the annual meeting of the stockholders of the West Division Street Railroad Company, he said : " When 1 talk to my friends in regard to their business for last year, they generally tell me that they made practi- cally nothing. When 1 compare what is being done in other lines of business, with the results we have obtained, I feel pretty well satisfied. * * '■* As we are now going it looks as though we would make more monev than we did last year."" Mr. Yerkes on the same day further said : " I think the present dividend i North Chicago 12 per cent. ; net earning, 15.07 per cent.) can l)e main- tained for a good while, if not increased. 1 do not know but it would be a good plan to double the capital stock and halve the divi- dends. " It thus appears that, in a time of general financial de- pression, these properties are prosperous to a high degree. Yet Mr. Yerkes and the interested '■^people connected icith our railroad companies,'^'' who it seems induced him again to aj^peal to the Legis- lature, and whose inordinate greed be so fitly represents, have the colossal impudence to call upon those who represent Illinois, to '< give us something, ^- * -^ tJiat thereimtation of our city may he rehabilitated; and th.at prosperity may again dawn upon us.'''' THE REAL SITUATION. The claim that immediate legislation is needed to induce the in- vestment of fresh capital in these roads is not borne out by the facts. Speaking before the Judiciary Committee of the House, of the present situation, Mr. Yerkes says : "Instead of having this light track, instead of horses and horse cars, we put in a cable road which cost 1130,000 for a double track mile ; we put in an electric line which cost $50,000 per double track mile ; we put in machinery at one station alone which cost us $600,000. * * * We have spent in the last twelve years $19,000,000. What for? To im- prove our roads, to extend them, to change the motive power." All this ivas done under existing legislation and upon twenty year ordinances. The investment is made and the improvements paid for. Securities representing the new capital invested, and others which are the sole surviving evidences of construction and equip- ment long since consigned to the scrap heap and still others which never evidenced anything but dividends expected, are outstanding in the hands of holders who regularly receive on them liberal interest and extraordinary dividends. The holders of the securities of these roads no doubt invested with the expectation that they will receive renewals of their ordi- nances, as Mr. Yerkes says. But has there been any serious threat to refuse such renewals? Have the companies even made any ap- plication to the proper and legal authorities to secure such renewals? It will be time enough to talk about anarchy and confiscation when the City of Chicago has refused these corporations fair treatment in the matter of the renewal of their ordinances. Until he has asked for terms and been refused just treatment by the City of Chi- cago, at whose hands he has received such princely gifts, it ill be- comes Mr. Yerkes to assail her fair name by talk of anarchy and confiscation. THE FACTS MUST BE DISCLOSED. The only legitiiiiHte plan u[)on which compensation can justly be paid by the companies to the public is one of profit-sharing. No matter what the payment jjurports to be based upon, unless there is a net profit under skillful and honest management no payujent at all should be made to the public which receives its benefit from the use of an improved highway for the transportation of passengers. This shows how impossible it is to make any fair adjustment by general law for the facts and circumstances surrounding each indi- vidual company and its business must be known before any fair ar- rangement can be made with it. We are told that only a few of the street railroads earn any divi- dends at all. This is undoubtedly true. Does this furnish any ar- gument against the payment of reasonable compensation by those roads which do earn enormous profits? Their position is as ridic- ulous and absurd, when they attempt to evade the payment of fair compensation, as would be that of a giant who objected to the bur- den imposed upon him because it was too heavy for the strength of a boy. What difference does it make to such companies whether other companies earn profits or not? No general law, such as is proposed, can be just and fair to the different street railroad com- panies and the public. Jud^e, then, how important it is that a full investigation of the street railroad situation should precede action of any kind. This takes time and sufficient time for it should be given. The complete reconstruction and rapid extension of the Chicago street railroads within the last dozen years, under existing hna and nj)on ticenty year ordinances, show that capital is available and even anxious for such investments. There is no emergency requiring the General Assembly to enact any hasty legislation whatever at the close of its session in behalf and on the sole invitation of these cor- porations. Renewals of their ordinances can be had for the asking on terms far more liberal to them than the circumstances demand. Though these corporations are commonly believed to have again and again corrupted her officials and filched her imperial resources, Chi- 10 cago is not seeking revenge but is still willing to treat them not only fairly but generously. There is ample time before their present ordinances expire to consider whether any legislation is desirable to enable the local authorities to grant longer renewals than for twenty years. Such legislation should be enacted, if at all, only after Chi- cago has been fully heard and every precaution taken to protect her rights. There is a conclusive presumption against any measure which is sought to be rushed through at this time upon the initiative of these corporations alone. THE COMPENSATION IS INADEQUATE. The rate of compensation provided to l)e paid to the corporate authorities is ridiculously inadequate. It is no more nor less than a free gift of millions upon millions of dollars to the street car companies, most of which would be absorbed by their managers and manipulators. It is not the public nor even the investing pub- lic which would benefit by this munificent gift, but the few insiders who manage the deal. STOCKJOBBING. The consolidation feature in Section 10 deserves a word of con- demnation. We live in an era of stock speculation by the man- agers and manipulators of corporate interests quite unexampled in the world's history! This abuse has grown to be a great public evil. Not alone those who seek to gamble on the market in stocks but every interest which touches investment in corporate securities be- comes the prey of these bold and unscrupulous operators. The Chicago street railway securities, and more particularly those of the West Division Railroad, furnish as complete and startling an illustration of this hurtful manipulation and speculation as can be found anywhere. Conditions became such, after the recent issues of securities by that company had been sprung on the market, that all investors sought to close out their holdings and even the very stock broker dared not hold them over night. Who was and is re- sponsible for this state of aflairs? The very same persons who are back of this attempt to spread the shield of the law over their past illegal operations and who now seek from the Legislature additional grants of power to enable them in the future to hicrcaso and multi- ply similar stock jobbing operations. A law to prohibit speculation in the stock of their own companies by officers and managers of cor- porations is much more needed to insure stability of financial inter- ests and honesty towards stockholders and the public than is one to legalize and extend the field of speculations of this character. SHAMELESS EFFRONTERY. The Gas Trust and the Whiskey Trust and now the proposed Street Railroad Trust by their nefarious schemes and plots, carried out in the stock market, often in bold and brazen defiance of the law, are what have given and will give to Chicago and Illinois securities whatever of bad repute they may have at home or abroad. Do you wish to aid these schemers and plotters? You are now asked to do so, in apparent seriousness, by these same men who have wrought so much confusion and destruction in the past. You are asked to do this as rebuke to anarchy and as a means to rehabilitate the reputation and credit of Chicago and Illinois. Words fail us with which fitly to characterize such monumental efi'rontery. jSIr. Y^erkes modestl}^ assumes to be the only person who under- stands the wants and requirements of the street railroads. He says : " 1 can safely say there has not been a single man, even of my own people, who fully understood those bills and also the relation of the street railroads to them.'' He even goes further and criticises the the different public officials, presumably including members of the Legislature, who opposed his will. Says Mr. Y^erkes, " But it appears that the street railroad busi- ness and the legislation required in regard to it are almost beyond ])eople's understanding!; And if this is the case how foolish it is for people in authority to undertake to criticise where they know noth- ing about the subject that they are criticising.'' Considered in the light of his experience with all the phases aljove presented and in view of the desires and exi)cctations which he ma}' indulge with reference to his proposed street railroad trust along similar lines, he may believe that he alone realizes the full possibilities of the situation. 12 It does not follow, however, that it is desirable or even safe to pass the Yerkes bill at his dictation. It is certainly ranch safer for the public if legislation be deferred rather than hastily to swallow his artful concoctions, which seem so difficult for others to under- stand, in the hurry and confusion incident to the closing days of a long and fatiguing session. THE ALLEN AND LITTLER BILLS. There seems to be a flock or whole family of these allied street railroad bills. They are all open to the objection, however, that no legislation at all is demanded by public interests at this time. Moreover, these bills are all alike in providing substantially nothing for the people and they all propose, in differing degrees, to benefit the street railroads at the public expense. The only safe course to pursue toward them all is to defeat them. If either of the bills which has been introduced should be passed it would perpetuate the use of the overhead trolley wires which are a constant and increasing menace to property and to human life. This is especially true in thickly settled districts from which they ought to be excluded and in which they should be superseded by improved methods. "GIVE US SOMETHING." We resent the aspersions cast upon the fair fame of Chicago by these men who have fattened upon her bounty and who now greedily strive for yet more munificent donations from the public. " Give us something'- they say "and bring back prosperity. " "Give us something and rehabilitate Chicago and Illinois." "Give!" cried the horse leech's daughter, and " Give !" and " Give I" They de- sire to help Chicago and Illinois by receiving something as a gift which shall be so alluring and attractive that idle capital will be eager to invest in it. Who would benefit by this ? Would it be the general public or these vociferous gentlemen? The rehabilitation they so eagerly seek can be certainly and speedily promoted by them. Let them abandon purely selfish considerations for the mo- ment. Let them cease their attempts to corrupt pul)lic servants. 13 Lot lliem (leal fnirly and openly with the pul)lic' and Cliicaiio will eniei'tje from the crisis which they have produced and which now so seriously threatens her i)rosperity. We respectfully submit that all these bills should be rejected by the lef^islature and consigned to obloquy, leaving the entire subject to be dealt with individually and separately by the different mu- nicijialities. JOSIAH L. LOMHARD, C/iari'iiuDi of Coiiiiiiittce of (hie Ibiudrcd. Edwin Burritt Smith, Newton A. Partridge, Special ( nninuttee.